by Calculated Risk on 10/11/2020 07:23:00 PM

The US is now mostly reporting 700 thousand to 1 million tests per day. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections (probably close to 1%), so the US still needs to increase the number of tests per day significantly (or take actions to push down the number of new infections).

There were 846,805 test results reported over the last 24 hours.

There were 46,776 positive tests.

Almost 7,700 Americans deaths from COVID have been reported in October. See the graph on US Daily Deaths here.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.5% (red line is 7 day average).

For the status of contact tracing by state, check out testandtrace.com.

And check out COVID Exit Strategy to see how each state is doing.

The second graph shows the 7 day average of positive tests reported.

The dashed line is the July high.

Note that there were very few tests available in March and April, and many cases were missed (the percent positive was very high - see first graph). By June, the percent positive had dropped below 5%.

Everyone needs to be vigilant or we might see record high cases this Fall and Winter.

by Calculated Risk on 10/11/2020 11:31:00 AM

IMPORTANT NOTE: The data below is based on the Census 2019 estimates. Housing economist Tom Lawler has pointed out some questions about earlier Census estimates, see: Lawler: "New Long-Term Population Projections Show Slower Growth than Previous Projections but Are Still Too High"

Six years ago, I wrote: Census Bureau: Largest 5-year Population Cohort is now the "20 to 24" Age Group.

Earlier the Census Bureau released the population estimates for 2019 by age, and I've updated the table from the previous post.

The table below shows the top 11 cohorts by size for 2010, 2019 (released this year), and Census Bureau projections for 2030.

In 2019, 8 of the top 10 cohorts were  under 40 (the Boomers will be fading away), and by 2030 the top 11 cohorts will be the youngest 11 cohorts (the reason I included 11 cohorts).

There will be plenty of "gray hairs" walking around in 2030, but the key for the economy is the population in the prime working age group is now increasing.

This is positive for housing and the economy.

Population: Largest 5-Year Cohorts by Year
Largest Cohorts	2010	2019	2030
1	45 to 49 years	25 to 29 years	35 to 39 years
2	50 to 54 years	30 to 34 years	40 to 44 years
3	15 to 19 years	55 to 59 years	30 to 34 years
4	20 to 24 years	35 to 39 years	25 to 29 years
5	25 to 29 years	20 to 24 years	5 to 9 years
6	40 to 44 years	15 to 19 years	10 to 14 years
7	10 to 14 years	10 to 14 years	Under 5 years
8	5 to 9 years	60 to 64 years	15 to 19 years
9	Under 5 years	50 to 54 years	20 to 24 years
10	35 to 39 years	45 to 49 years	45 to 49 years
11	30 to 34 years	5 to 9 years	50 to 54 years

Click on graph for larger image.

This graph, based on the 2019 population estimate, shows the U.S. population by age in July 2019 according to the Census Bureau.

Note that the largest age groups are all in their mid-20s.

And below is a table showing the ten most common ages in 2010, 2019, and 2030 (projections are from the Census Bureau).

Note the younger baby boom generation dominated in 2010.  By 2019 the millennials have taken over and the boomers are off the list.

My view is this is positive for both housing and the economy, especially in the 2020s.

Population: Most Common Ages by Year
	2010	2019	2030
1	50	28	39
2	49	29	40
3	19	27	38
4	48	30	37
5	47	26	36
6	46	25	35
7	20	31	41
8	45	34	30
9	18	24	34
10	52	33	33

by Calculated Risk on 10/10/2020 06:30:00 PM

The US is now mostly reporting 700 thousand to 1 million tests per day. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections (probably close to 1%), so the US still needs to increase the number of tests per day significantly (or take actions to push down the number of new infections).

There were 1,011,075 test results reported over the last 24 hours.

There were 57,206 positive tests.

Over 7,200 Americans deaths from COVID have been reported in October. See the graph on US Daily Deaths here.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.7% (red line is 7 day average).

For the status of contact tracing by state, check out testandtrace.com.

And check out COVID Exit Strategy to see how each state is doing.

The second graph shows the 7 day average of positive tests reported.

The dashed line is the July high.

Note that there were very few tests available in March and April, and many cases were missed (the percent positive was very high - see first graph). By June, the percent positive had dropped below 5%.

Everyone needs to be vigilant or we might see record high cases this Fall and Winter.

by Calculated Risk on 10/10/2020 08:11:00 AM

The key economic reports this week are September CPI and Retail Sales.

For manufacturing, September Industrial Production, and the October New York and Philly Fed surveys, will be released this week.

----- Monday, October 12th -----
Columbus Day Holiday: Banks will be closed in observance of Columbus Day. The stock market will be open. No economic releases are scheduled.

----- Tuesday, October 13th -----
8:30 AM: The Consumer Price Index for September from the BLS. The consensus is for a 0.2% increase in CPI, and a 0.2% increase in core CPI.

----- Wednesday, October 14th -----
7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The Producer Price Index for September from the BLS. The consensus is for a 0.2% increase in PPI, and a 0.2% increase in core PPI.

----- Thursday, October 15th -----
8:30 AM: The initial weekly unemployment claims report will be released. Initial claims were 840 thousand the previous week.

8:30 AM ET: The New York Fed Empire State manufacturing survey for October. The consensus is for a reading of 15.0, down from 17.0.

8:30 AM: the Philly Fed manufacturing survey for October. The consensus is for a reading of 14.5, down from 15.0.

----- Friday, October 16th -----
8:30 AM ET: Retail sales for September will be released.  The consensus is for a 0.7% increase in retail sales.

This graph shows the year-over-year change in retail sales and food service (ex-gasoline) since 1993. Retail and Food service sales, ex-gasoline, increased by 4.0% on a YoY basis in August.

9:15 AM: The Fed will release Industrial Production and Capacity Utilization for September.

This graph shows industrial production since 1967.

The consensus is for a 0.6% increase in Industrial Production, and for Capacity Utilization to increase to 71.9%.

10:00 AM: University of Michigan's Consumer sentiment index (Preliminary for October).

by Calculated Risk on 10/09/2020 06:32:00 PM

The US is now mostly reporting 700 thousand to 1 million tests per day. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections (probably close to 1%), so the US still needs to increase the number of tests per day significantly (or take actions to push down the number of new infections).

There were 1,013,588 test results reported over the last 24 hours.

There were 57,542 positive tests.

Over 6,500 Americans deaths from COVID have been reported in October. See the graph on US Daily Deaths here.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.7% (red line is 7 day average).

For the status of contact tracing by state, check out testandtrace.com.

And check out COVID Exit Strategy to see how each state is doing.

The second graph shows the 7 day average of positive tests reported.

The dashed line is the June low.

Note that there were very few tests available in March and April, and many cases were missed (the percent positive was very high - see first graph). By June, the percent positive had dropped below 5%.

If people would stay vigilant, the number of cases might drop to the June low in November - but that is looking unlikely.

by Calculated Risk on 10/09/2020 02:08:00 PM

The following graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the September 2020 seasonally adjusted annual sales rate (SAAR).

Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand SAAR in May 2009.  Then heavy truck sales increased to a new all time high of 575 thousand SAAR in September 2019.

However heavy truck sales started declining late last year due to lower oil prices.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."


Click on graph for larger image.

Heavy truck sales really declined towards the end of March due to COVID-19 and the collapse in oil prices.

Heavy truck sales are now back to March 2020 levels, but still below February 2020 (pre-COVID).

Heavy truck sales were at 415 thousand SAAR in September, down from 438 thousand SAAR in August, and down 26% from 563 thousand SAAR in September 2019.

Year-to-date heavy truck sales are down 28% compared to the same period in 2019 (288.5 thousand in 2020 compared to 399.4 thousand in 2019 through September).

by Calculated Risk on 10/09/2020 12:23:00 PM

From Merrill Lynch:

We are tracking 33% qoq saar for 3Q GDP growth. [Oct 9 estimate]
emphasis added

From Goldman Sachs:

We left our Q3 GDP tracking estimate unchanged at +35% (qoq ar).. [Oct 9 estimate]

From the NY Fed Nowcasting Report

The New York Fed Staff Nowcast stands at 14.1% for 2020:Q3 and 4.8% for 2020:Q4. [Oct 9 estimate]

And from the Altanta Fed: GDPNow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2020 is 35.2 percent on October 9, slightly down from 35.3 percent on October 6. [Oct 9 estimate]

It is important to note that GDP is reported at a seasonally adjusted annual rate (SAAR).  A 30% annualized increase in Q3 GDP, is about 6.8% QoQ, and would leave real GDP down about 4.2% from Q4 2019.

The following graph illustrates this decline.

Click on graph for larger image.

This graph shows the percent decline in real GDP from the previous peak (currently the previous peak was in Q4 2019).

This graph is through Q2 2020, and real GDP is currently off 10.2% from the previous peak.  For comparison, at the depth of the Great Recession, real GDP was down 4.0% from the previous peak.

The black arrow shows what a 30% annualized increase in real GDP would look like in Q3.

Even with a 30% annualized increase (about 6.8% QoQ), real GDP will be down about 4.2% from Q4 2019; a larger decline in real GDP than at the depth of the Great Recession.

by Calculated Risk on 10/09/2020 08:22:00 AM

Note: Both Black Knight and the MBA (Mortgage Bankers Association) are putting out weekly estimates of mortgages in forbearance.

This data is as of October 6th.

From Forbearances See Largest Single Week Decline Yet

After a slight uptick last week, active forbearance volumes plummeted over the past seven days, falling by 649K from the week prior. An 18% reduction in the number of active forbearances, this represents the largest single-week decline since the beginning of the pandemic and its related fallout in the U.S. housing market.

New data from Black Knight’s McDash Flash Forbearance Tracker shows that as the first wave of forbearances from April are hitting the end of their initial six-month term, the national forbearance rate has decreased to 5.6%. This figure is down from 6.8% last week, with active forbearances falling below 3 million for the first time since mid-April.

Click on graph for larger image.

This decline noticeably outpaced the 435K weekly reduction we saw when the first wave of cases hit the three-month point back in July.

As of October 6, 2.97 million homeowners remain in COVID-19-related forbearance plans, representing $614 billion in unpaid principal.
...
Though the market continues to adjust to historic and unprecedented conditions, these are clear signs of long-term improvement. We hope to see a continuation of the promising trend of forbearance reduction in the coming weeks, as an additional 800K forbearance plans are slated to reach the end of their initial six-month term in the next 30 days.

by Calculated Risk on 10/08/2020 06:46:00 PM

The US is now mostly reporting 700 thousand to 1 million tests per day. Based on the experience of other countries, the percent positive needs to be well under 5% to really push down new infections (probably close to 1%), so the US still needs to increase the number of tests per day significantly (or take actions to push down the number of new infections).

There were 930,355 test results reported over the last 24 hours.

There were 54,870 positive tests.

Over 5,600 Americans deaths from COVID have been reported in October. See the graph on US Daily Deaths here.

Click on graph for larger image.

This data is from the COVID Tracking Project.

The percent positive over the last 24 hours was 5.9% (red line is 7 day average).

For the status of contact tracing by state, check out testandtrace.com.

And check out COVID Exit Strategy to see how each state is doing.

The second graph shows the 7 day average of positive tests reported.

The dashed line is the June low.

Note that there were very few tests available in March and April, and many cases were missed (the percent positive was very high - see first graph). By June, the percent positive had dropped below 5%.

If people would stay vigilant, the number of cases might drop to the June low in November - but that is looking unlikely.

by Calculated Risk on 10/08/2020 03:32:00 PM

From the Association of American Railroads (AAR) Rail Time Indicators. Graphs and excerpts reprinted with permission.

U.S. rail volumes in September ranged from “generally getting better” to “already pretty good.”

On the “already pretty good” side, average weekly U.S. intermodal originations in September were 284,777 units. That’s the fourth most for any month in history and up 7.1% over September 2019 ...

U.S. rail carloads are in the “generally getting better” category. Total carloads in September were down 9.7% from last year. That’s still a sizable decline, to be sure, but it’s the smallest since March 2020.
emphasis added

Click on graph for larger image.

This graph from the Rail Time Indicators report shows the six week average of U.S. Carloads in 2018, 2019 and 2020:

On the carload side, volumes are still down, but by less than they were. U.S. railroads originated an average of 223,909 total carloads per week in September 2020. That’s their lowest weekly average for September since sometime before 1988 (when our data begin). That said, total carloads in September 2020 were down 9.7% from September 2019 — their smallest monthly year-over-year percentage decline since March 2020, when the lockdowns began.

The second graph shows the six week average of U.S. intermodal in 2018, 2019 and 2020: (using intermodal or shipping containers):

Like nearly every other rail category, intermodal fell sharply in the spring — it was down 12.6% in Q2 2020, including a 17.2% decline in April.

A few months later, things are very different. U.S. railroads originated 1.31 million containers and trailers in September 2020, up 7.1% over September 2019 — the biggest year-over-year percentage gain for intermodal since December 2016.
...
Why the change? U.S. imports of consumer goods are surging — they set an all-time monthly record in August 2020, with China supplying a huge share of them. After stalling in the spring, China’s export machine has come roaring back.

Note that rail traffic was weak prior to the pandemic.